Key Morningstar Metrics for Lindsell Train UK Equity D Acc
- Morningstar Medalist Rating: Bronze
- People Rating: Above Average
- Process Rating: Average
- Parent Rating: —
Lindsell Train UK benefits from a veteran fund manager who has followed a well-defined investment philosophy for his whole career. Recent performance has been underwhelming, and there have been some notable single-stock upsets. Concentration has not been rewarded. We maintain a measured stance, and the Above Average People rating and Average Process rating are unchanged.
Nick Train’s ongoing involvement as lead manager continues to warrant merit. He began his career as an investment manager at GT Management in 1981 and has managed this strategy since 2001 and this fund since 2006. Although the team is relatively small, his depth of experience in UK equities continues to differentiate the strategy within its peer group. He has delivered exceptional long-term returns over multiple market cycles.
This strategy invests in a highly concentrated portfolio of high-quality stocks with durable, cash-generative franchises that can prosper through multiple business cycles. The manager targets companies that fulfill strict criteria, including a proven track record (he prefers a well-established business), a large and growing business franchise, high barriers to entry, strong financial characteristics (including net cash on the balance sheet), a track record of producing a high return on capital, and low capital intensity.
Nick Train’s Concentrated Portfolio
Nick Train creates a highly concentrated portfolio of 20-25 of his best ideas, paying no heed to the benchmark. As a result, the portfolio will look very different from its index. More than 80% of assets sit within the top 10 holdings, and the manager holds the five largest positions close to the 10% individual maximum permitted under non-UCITS retail scheme regulations.
Recent underperformance highlights the risks associated with the fund’s high concentration. While the strategy’s strong long-term record is difficult to ignore, it is important to place the past five years in the context of the significant outperformance investors enjoyed beforehand. From inception in August 2006 to the end of January 2026, WS Lindsell Train UK Equity Acc delivered an annualized return of 8.28% net of fees, compared with 6.91% for the FTSE All Share Index and 6.56% for the EAA large-cap equity Morningstar Category.
The year 2025 marked the fund’s fifth consecutive year of underperformance and was exceptionally challenging. The fund ranked in the 100th percentile. The Acc share class declined 7.2% in a year when the index rose 24%, while the category average returned 20.7%. A complete lack of exposure to strongly performing sectors, most notably banks, created a significant headwind. Concentration further amplified the issue: Several of the largest holdings, including Diageo DGE, London Stock Exchange LSEG, RELX REL, and Rightmove RMV (each representing around 9%-10% of the portfolio), failed to deliver. Position sizing decisions also detracted. Games Workshop, initiated during the year, performed well, yet the very small position size limited its contribution.
Looking ahead, the strategy’s success remains closely tied to the fortunes of Train’s highest-conviction holdings, which continue to drive the portfolio’s outcomes. For investors who remain committed to the manager’s long-term philosophy, this may prove an attractive entry point. However, momentum could continue to work against this approach in the near term.
